Middle Sea considering future of its international reinsurance business
by a staff reporter
The Middle Sea Group is considering the future of its international reinsurance business, according to a company statement issued after a company extraordinary general meeting was held. The statement said: "In June 1981 the company was set up primarily as a reinsurance company with the prime objective of becoming the recipient of the compulsory reinsurance legal cession under Section 15 of the Insurance Business Act of the same year. Therefore as a strategy for overseas expansion Middle Sea entered the London market through its branch office in 1987 writing a book of international reinsurance business. This particular business, which has always proved to be highly competitive, has been under constant monitoring by the board; indeed, at this time the board is considering the future of this particular operation."
The statement said that both Middle Sea and Middle Sea Valletta, formed as a result of an alliance with Bank of Valletta plc and the Munich Reinsurance Company, succeeded in attaining their primary objective of becoming leading insurers in general business and long- term business respectively in Malta. "In general business, Middle Sea is expected to increase its revenue to Lm11m, while Middle Sea Valletta's revenue is expected to go up to Lm13m. Assets are also expected to increase to Lm43.3m and Lm54.0m respectively," it said.
Middle Sea said that future growth must come from outside Malta. "The board of directors have identified the Euro-Mediterranean region as offering the right opportunities. With this in mind an agreement was concluded with Assicurazioni Generali to take over their branch in Gibraltar. The MFSC and the Gibralterian Financial Services Commission have authorised Middle Sea Insurance plc to commence operations in Gibraltar. Moreover, Mascarenhas Insurance & Finance Ltd have been appointed to act as Middle Sea's agent and representatives in Gibraltar. It is expected that this will commence as from 1 January 2000."
It added that Middle Sea has also been in discussion with the Corporation Mapfre of Spain. Mapfre Group is one of the leading Spanish groups of Insurance companies. An agreement has recently been signed for the transfer of a majority interest in the company Mapfre Progress Assicurazione SpA in Italy/Sicily subject to the MFSC and ISVAP (Istituto per la vigilanza sulle Assicurazioni Private di Interesse Collettivo) approval and a satisfactory due diligence exercise.
Other discussions have been simultaneously initiated with Cypriot potential partners. It is the intention of Middle Sea either to set up a representation in Cyprus or strike an alliance with these partners in the setting up of a new general business company. Further investigations have to be conducted prior to determining investing in this area.
Middle Sea Group chairman Mario Grech also said that this was an opportune time to strengthen Middle Sea's strategic alliance with Bank of Valletta. During the extraordinary general meeting a resolution was proposed enabling any shareholder with 21 per cent shareholding to be able to purchase up to 25 per cent holding. In the circumstances there will be one shareholder, Bank of Valletta plc, who will hold 25 per cent. After having been put to the vote the resolution was passed with 79 per cent of members voting in favour and 0.24 per cent voting against. The remaining 20.73 per cent represented those members who did not attend the meeting. This means that 99.70 per cent of those members present at the meeting voted in favour whereas 0. 70 per cent of those members present voted against.
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